Mayo Clinic, the Rochester, Minn.-based hospital system and medical hub, steadily grew its revenue and operating surplus in the first half of 2016.
But like other not-for-profit health systems, Mayo suffered from large investment losses that dragged down its overall surplus.
Mayo has expanded its reach in recent years by acquiring some local hospital systems and expanding its affiliation network, which gives hospitals and medical groups across the country access to Mayo's expert physicians and resources while remaining independent. The system also plans on spending billions of dollars to turn its main campus into a “destination medical center.”
Mayo's revenue in the first half of 2016 increased 7.6%, totaling $5.44 billion, according to the system's second-quarter financial statements. Less than 5% of Mayo's patient revenue came from self-paying and uninsured patients.
Its operating surplus increased 5.4% year over year to $255 million, giving Mayo a 4.7% operating margin. That margin was almost the same as what Mayo recorded in the first half of 2015, when the system struggled to control labor and supply costs. It's still down a lot from 2014, when Mayo's operating margin was 8.5%.
The financial situation deteriorated more in the first half after accounting for $157 million of investment losses. Mayo's total surplus as of June 30 was $121 million, compared with $344 million at the same time last year.
